A For-Profit Foster Care Agency, Traded on the Stock Exchange, Deadly to Children

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February 20, 2015; BuzzFeed News

One of the nation’s largest for-profit foster care agencies, Mentor, has recently come under scrutiny after investigation has revealed a string of missteps leading to abuse, mistreatment, and several deaths. While organization executives have dismissed claims that National Mentor Holdings’ negligence has resulted in substandard services, the company has received some of the highest numbers of serious violations in several states, including Massachusetts, Georgia, and Texas.

In some of its most severe instances of abuse, failed background checks on foster parents had detrimental results to the children in Mentor’s care. At Last Chance Farm in Maryland, boy after boy was sexually abused at the hands of foster parent Stephen Merritt. Even after reports by foster children, a letter from a former victim’s psychologist, and several police investigations, Mentor continued to place young boys in Merritt’s care for at least seven years.

In Texas, failed screenings of potential parents allowed for several failed placements with Sherill Small. Mentor failed to interview adequate numbers of relatives, relying instead on the reference of Small’s daughter, who was herself convicted of aggravated kidnapping and robbery. Meanwhile, Small’s husband was also approved as a foster parent despite his admission to a long-time cocaine addiction. After several failed placements, two-year-old Alexandria Hill was placed in Small’s care, and then murdered at Small’s hand in a fit of frustration. 

And while both foster parents would never have been approved had adequate screening and background check policies been in place, poor decision-making by Mentor staff enabled the abuse to occur. Such cases have lead to investigations into the company as a whole, and as a result, Mentor’s organizational goals have been questioned.

Instead of a strong focus on quality services to children, former staff members of Mentor claim that the central focus of operation is increased profit margins. According a former employee, “You feel the pressure. You have to make those targets. I went there because I care about services for kids. I eventually became a machine that cared about profits. I didn’t care about kids.”

As a company traded publicly on the New York Stock Exchange, there were undoubtedly times when the costs of quality services at Mentor have come into conflict with the demand for higher shareholder profits. Foster care agencies are intended to serve as a safety net for vulnerable children, and the rapid expansion of corporate entities for increased market share in such human service industries capitalizes on resources that should be passed on in services to those in need. 

With this in mind, many foster care agencies contracted by state and local governments are nonprofit agencies focused on quality service over profits. Yet the past thirty years have seen increases in for-profit companies entering the field. While some local and state governments have restricted contracts with for-profit agencies, strong partnerships between entities such as Mentor and nonprofit sister organizations have allowed their position in foster care to continue. Similar to the relationship between charter schools and related for-profit entities, such intertwined relationships between nonprofits and for-profit entities bring questions of accountability and motive in a variety of industries.—Michele Bittner


  • Sharon Charters

    Why in heaven’s name would a for profit company be allowed to operate in providing child protection services. The resources available for this crucial need in our communities are so limited that there is no allowance for “profit” (and shouldn’t be). This is a head shaker.

  • E. Freebird

    Even the non-profits are making money. That’s why comptrollers who run non profits are sitting in prison for stealing the hundreds of thousands of dollars that CPS gives foster homes. All foster homes are for profit. Take a look at Free to be program in Los Angeles, the lady pays herself $300,000 per year.

  • Lewis

    I work in the behavioral health field and find this kind of characterization very dangerous. The article implies that for profit companies are inherently bad and non-profits are sublime.

    I have witnessed unprecedented greed from non-profits and unusual charity from for profits that actually support through contributions many of the non-profits.

    Any organization caring for kids should be judged by their quality of care not by their tax status.

  • Lewis

    Non-profit companies make can make a very large profit it is just not taxed. So they build up very large cash reserves that can be used for other services (great) or large pensions (bad) for the director.

    Don’t worry many people share your understanding that have not actually been involved in managing a non-profit.

  • Benjamin

    Are you one of them? Are you a member of the stock industry? …it’s time for a change…for the better…

  • GPC Publication

    It is outrageous. However, when $$$ is involved in any shape or form vs the safety and welfare of children, this will also be an issue. Noting, even non-profit is a misnomer in some cases..ie CEOs get a 6 digit salary. (Sidenote: to date there are 7.5 Million grandparents, who give a flip about the money..ie care for their grandkids without any subsidies since they know it is the right thing to do, yes.)
    Private vs Gov has always been an issue. Even brought up as Privatization being a Reform Suggestion?
    Here is an example, suggested by the Heritage Foundation. Have some older articles, but can’t seem to find them in all my “Stuff”>> http://www.heritage.org/research/reports/2011/03/foster-care-safety-net-or-trap-door

  • GPC Publication

    Yup, I hear ya.
    But one must realize that it is the Death and Destruction that makes the news for profit. Noting, it is human nature to want to hear such.
    However, our staff looks for the positive in any negative situation and/or seek answers for the many concerns that face Our Families, Our Children, Our Future.
    We also base our Research on the Holistic approach..ie look at all the factors in a situation, without prejudice. Most difficult to do and takes years of training of the mind. A mind that is influenced by the philosophy of paradigms…ie most of our opinions are based on our life experiences.

  • Lewis

    Am I one of them?

    I serve and have served as Chairman on two non-profit boards with revenue around 50 Million dollars. In my own professional life I owned a for profit company that was not traded on the stock exchange.

    I have served on Government committees and testified before the legislature numerous times.

    None of this changes the facts that Government, public, and private both for and not for profit do both good and bad.

    Lumping anyone of them into a bucket is akin to racism.

    There are many great things about being a non-profit and the work we achieve but I do not think it serves anyone’s best interest to smear another because it makes for good headlines.

    I could defend and assault either side and nothing about what I am saying is to defend the company in this article.

  • ruth

    comparing a distinction between groups organized with or without a profit motive to racism makes no sense. The fact is that for profit organizations have a profit motive as their bottom line and when this begins to compete with the well being of participants especially when they are vulnerable, this can create problems. Making a distinction and suggesting that one sector might be a better fit than another for such programs is not in any way akin to racism and I find this rhetorical device to be a bit off the wall.